Technology and Construction Court and the Civil Procedure Rules practice today

Going into a dispute with all guns blazing may make you feel better, cause much blood on the carpet etc, but it's a lousy way of keeping business and may well cost you an arm and a leg!
What is more forget the notion I was ‘born’ with that Litigation in the Courts is a public service open to you as a constitutional right; you are entitled to pursue your rights and obtain your remedies in Her Majesty's High Court. Lord Woolf changed all that – it has rightly been called a jurisprudential revolution. He said:
My approach to Civil Justice is that disputes should, wherever possible, be resolved without litigation. Lord Woolf .⁽¹⁾
As Tony Bingham, barrister and construction commentator said at the time: “It is just as though Marks & Spencer put up a sign saying: “try buying your socks and pants somewhere else first”“.

So not only do you not have the right to declare war on the oppo when you want before her majesty’s judges, in addition the rule book carries a serious health warning if you start the off a bit too sharp!

The Pre-action Protocol for Construction and Engineering Disputes (“the Protocol”) was implemented on 2 October 2000 for Construction and Engineering Disputes in the TCC. With a few limited exceptions⁽²⁾ (including the making of an application for the enforcement of an adjudicator's decision) the Protocol should be used for all claims that are likely to be brought before the TCC.

The aim of the Protocol is to promote an early exchange of information and encourage the parties to reach a settlement or at least to agree the most efficient way to manage any proceedings that may be necessary.
But non-compliance with the Protocol can lead to the imposition of costs sanctions.

The general objectives

The general objectives and aims of the protocol for construction and engineering disputes is the same as that for the other protocols in force. In essence it is to ensure that before the parties actually commence Court proceedings: -

• Both the Claimant and the Defendant have provided sufficient information so that they know and understand the other’s case.
• Both parties have had an opportunity to consider the other’s case so as to be in a position to accept or reject all or any part of the case that is being advanced at an early stage of the dispute.
• The encouragement of more pre-action contact between the parties.
• To ensure better and earlier exchange of information between the parties.
• To ensure better pre-action investigation by the parties of their own case and the case made against them.
• To ensure that the parties have had at least one formal meeting, the purpose of which is to identify, define and possibly agree issues between them and to explore the best possible way of resolving the claim without recourse to the Courts.
• Compliance with the Protocol will put the parties in a position where they may be able to fairly settle cases at an early stage without recourse to the Courts.
• Should Court proceedings become necessary, compliance will ensure that proceedings will be conducted more efficiently and to any timetable that is imposed by the Court.

The Protocol facilitates a clearer plan of how a case should progress pre-action. The protocol advocates a “cards on the table” approach and the spirit, if not the letter, should be followed in all sizes of claim. This is of course subject to proportionality of work and costs in small claims track cases. It assists and aids early exchange of information, better prepares the parties for litigation and ideally, persuades parties to formulate their cases earlier and so be aware of whether they should be seeking an alternative method of resolving the dispute, or even settling the matter, rather than charging into litigation. Of course, the work, time and cost in preparing an action prior to commencing litigation may still be substantial.

Key features

Key features of the Protocol include the sending of a formal claim letter and, once a response has been received, the holding of at least one Pre-Action Meeting. One of the items to be discussed at this meeting is whether the dispute could be more appropriately settled by way of some form of alternative dispute resolution.

The Letter of Claim

Most of us will be familiar with the traditional letter before action. The Protocol however requires something that is more substantive.

As a first pre-action step, the Protocol requires that the Claimant or his Solicitor prior to actually commencing Court proceedings “shall” send to each and every Defendant a letter of claim. The Protocol states “if appropriate to his registered address”. It would be good practice to send a copy both to the registered and trading address. The Protocol requires the letter of claim to contain the following information:

• Details of the Claimant’s full name and address.
• Details of the full name(s) and address(es) of each proposed Defendant(s)
• A clear summary of the facts on which each claim is based
• The basis on which each claim is made, stating the principle contractual terms and statutory provision relied upon
• The precise nature of relief being claimed.
• Where damages are claimed the Claimant must provide a breakdown detailing how these damages have been quantified.
• Where a sum is claimed pursuant to a contract, all particulars as to how this sum has been calculated must be provided
• Where an extension of time is claimed the period claimed must be clearly stated.
• In instances where a claim having been made was rejected by the Defendant, and the Claimant is able to identify the reason(s) for the rejection, the letter of claim must set out why the Claimant says that the claim was wrongly rejected by the Defendant.
• Where the Claimant has instructed experts on whose evidence he intends to rely, the names of these must be provided to the Defendant. Furthermore, the issues to which the expert’s evidence will be directed must be identified. Similarly such obligations will apply to a Defendant who has also instructed an expert.
  

Although not specifically stipulated in the Protocol, it is often prudent to append supporting documentation with the letter of claim by way of pre-action disclosure. It is not uncommon for a Claimant to write to a Defendant stating that damages yet to be quantified will be claimed or that an extension of time is to be sought but the period has not as yet been assessed. This of course, will no longer be acceptable without some attempt at either explaining why such a truncated approach is taken or some other intelligent sampling analysis. Parties must otherwise endeavour to set out fully their respective stalls from the outset.

The Defendant’s response

Once the Claimant has sent to the Defendant the letter of claim, the Defendant is required to acknowledge receipt in writing within 14 days. In the event that the Defendant fails to do so then the Claimant can commence proceedings. In my experience these times are adequate only in the smallest of claims and my opponents commonly these periods are extended by agreement sometimes to as much as 10 weeks or so.

Upon receipt of the letter of claim, if the Defendant has any objections as to the Court’s jurisdiction, e.g. due to argument as to invocation of an arbitration agreement, or that the Claimant has the wrong Defendant, such objections should be raised within 28 days - subject again to agreed extension. In such circumstances, the Protocol does not require the Defendant to send a response to the letter of claim. If the Defendant fails to make such objections at this stage, he may nevertheless do so in subsequent Court proceedings. However, on the issue of costs, the Court may take this failing into account.

The Defendant has 28 days from receipt to respond to the letter of claim. The parties can however agree to extend this period up to a maximum period of 4 months. If the Defendant fails to respond within 28 days or, such period agreed between the parties, then the Claimant is ‘entitled’ to commence proceedings.

Where the Defendant’s response makes it clear that he has a counterclaim, then the Claimant must also respond within 28 days (or such period as the parties have agreed, up to a maximum of 4 months).

The Protocol stipulates that the Defendant’s response contains information as to:

• Facts which are agreed and where not agreed reasons
• Which claims are accepted and where rejected the reasons
• Where a claim is accepted in whole or in part, the Defendant must say whether damages, sums, or extensions of time were accepted or rejected. Where rejected reasons must be given.
• Where contributory negligence is alleged, a summary of facts supporting this
• Whether the Defendant intends to make a counterclaim. Where he does, the Defendant is required to provide the same information, which the Protocol requires in respect of the letter of claim.
• Details of experts who have been instructed and whose evidence is to be relied upon, identifying the issues to which that evidence will be directed.

Pre-action meeting

There is a requirement that the parties should meet at least once as soon as possible after the Defendant’s response, or where there is a counterclaim, to the Claimant’s response to the counterclaim. There can be more than one such meeting. The aim of which is to:

• For the parties to try and agree the main issues between them
• For the parties to identify what the main points of disagreement are
• For the parties to consider how the issues can be resolved between the parties without more proceedings.
• If agreement is not possible and the parties are to litigate, to agree how best to proceed in accordance with the overriding objective in part 1.1 of the CPR
  

A question for the form

Lord Woolf envisaged that the parties should treat the Courts as a last resort and other avenues to reach a fair settlement should be explored by the parties. This is reflected in the Court Allocation Questionnaires, which ask the question as to whether the parties wish to stay Court proceedings to attempt settlement. At the pre-action meeting, the parties are required to consider whether ADR may be appropriate. If it is evident that the parties are unable to resolve the dispute without recourse to the Courts, then they must use their best endeavours to try and agree such issues as whether a joint expert can be appointed, the extent of disclosure of documents and the conduct of the litigation with the aim of minimising cost and delay.

Although the pre-action meetings are treated as being without prejudice, the Court can and sometimes does require parties to disclose whether a meeting took place, the parties in attendance, the identity of any parties who refused to take part and an explanation as to why such a meeting did not take place and any agreements reached. A party who therefore refuses to participate runs a real risk of cost sanctions being imposed.

Beware failure to comply with the Protocol will likely result in cost sanctions against a defaulting party where Court proceedings are commenced without compliance to it.

Its true adhering to the protocol has, in my experience, settled cases that would otherwise now be in Court, without the need for parties to incur substantial costs. In other cases where this has not happened, at least the issues in dispute have been narrowed. The protocol generally works well in practice and many clients like the fact that the first thing their lawyer says is “we should try and resolve this” rather than “let's issue a claim form”.

Complying with the pre-action protocol itself has become a costly and time-consuming process. It usually starts with a claimant producing a detailed claim, often with expert evidence and witness statements, and sometimes against a number of potential defendants. The strategy is usually to force the parties to mediate and settle as quickly as possible. Nothing wrong with that, many would say, and there is no doubt that it often works. However, what if the case has no merit? The defendant and its insurers are faced with a dilemma – they must convince the Claimant that its case is futile, however, this will involve engaging an expert, perhaps a lawyer, too, and incurring costs that it will never recover, even if it persuades the Claimant not to pursue the case. If it ignores the case, it risks the wrath of the Court if the matter ever comes before a judge. Even if it wins, it may be penalised in costs for failing to comply with the protocol. To put this in perspective, a defendant may easily have to find a £50 -£100k sum to comply with the protocol in a complex case. Remember, complying with the protocol is not compulsory. In circumstances where you have a strong defence, then consider testing the mettle of the Claimant – call its bluff and force it to start proceedings.

The Law Society survey

The Law Society has established the Woolf Network which each year compiles a Questionnaire on the Woolf Reforms, the 5th questionnaire dated March 2003 claims that 92% of the questionnaire respondents thought the CPR rules “were working well”, however a main concern was the insufficient enforcement of protocols.

The TCC has developed judicial guidance through case law aimed at supporting the protocols and the Judges have made it clear that the protocols should be observed (see Paul Thomas Construction v Hyland & Anr⁽⁵⁾ and Liverpool City Council v Rosemary Chevasse Ltd). The Woolf questionnaire, however, stated that 42% believed that the practice direction on protocols was insufficient to enforce proper behaviour between the parties pre-action. In 2001, the questionnaire stated that in only 31% of cases were sanctions imposed for breaches of the protocols. The same questionnaire also stated that 15% claimed the protocols had not generally been complied with. This year’s questionnaire cited an inconsistent approach by the Courts in the sanctions for breaches of the protocols as a problem.

The main effect of the protocols has been the development of front-loaded litigation. For lawyers the problem exists of how to reassure the parties involved that the extra effort and cost can, and does, yield the desired result without necessarily ending in a glory day in Court. Statistics recently published by the TCC⁽⁶⁾ show that since the introduction of the Civil Procedure Rules in 1999 the number of writs/claims issued in the TCC has fallen drastically from 1,387 in that year, to only 386 in 2002, of which only 48 went to trial, the remainder either settling (321) or being transferred (5). Of course, when considering construction legal disputes due recognition must be given to the role of adjudication and its growth in usage as an alternative method of dispute resolution, which must have lead to a reduction in the number of claims in the TCC. However, there is a school of thought that adjudication has had next to no role to play in the reduction of TCC construction claims⁽⁷⁾ . The TCC’s recent statistics also show that since the all time low figure of only 346 actions in 1999 the number of claims issued since has risen year on year, albeit slowly⁽⁸⁾.

Although these statistics indicate how construction disputes are being disposed of, they do not tell us whether the parties and/or lawyers are happier with the results produced owing to the involvement of the pre-action protocol in disposing of the claims. There will be those who used the protocol to conduct their litigation and feel it aided a successful or fair judgment and those who didn’t make it to Court either because the early collation of the claim and issues, as required by the protocol, precipitated a settlement or an alternative dispute method such as mediation was used successfully.

Prior to the introduction of pre-action protocols it was suggested that lawyers needed to buck up their ideas and tackle claims referred to them from clients quicker and more thoroughly. It was thought the lackadaisical manner in which lawyers reviewed files. Particularly then non ORSA/TCC lawyers meant that a claim that was in fact not very strong or was even bound to failure was not being assessed as such until much later into the litigation process, usually involving the wasted time of the Court.

A possible advantage of the protocol and its affect on the parties and lawyers maybe not so much that it has made the whole dispute process cheaper but at least with the options of settling or mediating a claim, or being well-prepared as a client heads down the litigious route, the desired result or a more satisfactory result is achieved for the parties, who may feel that at least their money was well-spent.

2. Adjudication enforcement and TCC practice

Adjudication offers rapid, cheap claims resolution, but has been hamstrung by doubts about how the Courts would deal with it.

We have had approximately 130 published judgments about adjudication since it all started nearly five years ago and 6000 adjudications. Of these 130, five are from the Court of Appeal.

Adjudications are supposed to be binding until the arbitrator or Court finally sort out the parties' disputes. But since the HGCRA came into force, many inroads have been made into the Adjudicator's power. For instance, the Courts have successfully disputed the binding nature of adjudications when adjudicators have decided points not referred to them, failed to decide points referred to them or behaved in a biased, unfair way. The effect has been to undermine the efficacy of adjudication.

Yet since the introduction of the HGCR Act in 1996, adjudication has steadily grown as a preferred method of resolving disputes. The first case on the enforcement of an adjudicator's decision decided by the Judge in charge of the Technology and Construction Court, took place in February 1999, but it has been a well-worn path since then. The TCC’s involvement in these disputes has been consistently part of their staple diet since then.

HH J Lloyd QC, the Judge in Balfour Beatty Construction v Lambeth⁽⁹⁾ made an interesting aside, with which I concur, about the success of adjudication. He said:

It is now clear that the construction industry regards adjudication not simply as a staging post towards the final resolution of the dispute in arbitration or litigation, but as having in itself considerable weight and impact that in practice goes beyond the legal requirements that the decision has for the time being to be observed.

In RJT Consulting Engineers v DM Engineering⁽¹⁰⁾ the Court held that there was no “contract evidenced in writing”, and, therefore, that the Adjudicator had no jurisdiction. Its a moral for any client to get that document signed!

Section 107(1) of the Construction Act provides that adjudication provisions apply only where the contract is in writing. An agreement may be in writing if “the agreement is evidenced in writing”. If a contract is not “in writing” then the act does not apply and an adjudicator has no jurisdiction.

Some might consider this an unfortunate decision, perhaps opening the door to a flood of jurisdictional challenges. The industry rarely records all of the material terms in writing, indeed those terms, which are material, are often not recorded in writing. However, the House of Lords has refused a petition to appeal.

The Court of Appeal decided that it is not enough to have evidence in writing that supports the existence of an agreement. What has to be proved in writing is the whole of the agreement, not part of it.

However, this could easily create serious problems for the industry, as contracts usually consist of express terms and implied terms. Put simply, the law will impute a term into a contract to give it business efficacy – to give effect to what businessmen must have intended.

By way of an example, let us say a client wanted a local builder to stucco his property with a rare local lime based plaster. Several firms could supply the lime based plaster but it was not immediately available. Nevertheless, the builder promised to do the job and the client promised the builder that he would pay him fairly and properly. It was implied that the price would be a reasonable one, taking into account the current market value of the lime based plaster (rates for labour and other materials having been agreed).

The duration of the contract was dependent on the procurement of the lime-based plaster and it was implied that the work would be carried out reasonably expeditiously. The parties intended to contract with each other, and a contract was concluded, even though most of the terms plugging the gaps were merely implied. This is a typically sieve-like construction contract – only watertight when all terms are taken into account.

What the RJT ruling concludes is that, for adjudication to take place, all the “express” terms of the contract must be evidenced in writing. The Court of Appeal talks about a record “of everything which has been said”.
This might sound good in theory, but in practical terms is potentially very bad news.

Parties to construction contracts are not always the most articulate people and the contracts they deal with are complex. Just as in my stucco example, it is frequently the case that not all contractual terms are evidenced in writing, nor even agreed verbally.

Yes, there will often be a good answer when an adjudicator's jurisdiction is challenged on the basis that the contract is not fully evidenced in writing; however, if applied rigidly, the Court of Appeal's ruling will mean that many disputes cannot be adjudicated at all, because they are under contracts only partly recorded.

T&E denied that the Housing Grants Construction and Regeneration Act 1996 was applicable, maintaining that there was no agreement in writing. Debeck relied upon Section 107(2)(c) and 107(4) of the Act, maintaining that, for the purposes of the Act, there was an agreement in writing as that agreement was evidenced in writing within the meaning of Section 107(2)(c) of the Act.

Debeck relied on a fax sent to T&E on 25 March 2001, which Debeck submitted contained all the relevant terms of the agreement and was thus sufficient to constitute written evidence of the agreement. Her Honour Judge Kirkham rejected this submission on two counts. First, the fax did not set out or record all of those matters on which Debeck itself relied on in pursuing its claim. For example, the fax did not explain even in summary terms the scope of the work to be undertaken; it was not clear whether materials were to be supplied or not; and the sequencing and programming of the work was also unclear. Second, a director of T&E gave evidence that there were further terms of the contract between the parties upon which T&E relied which were not recorded in the fax. For example, these matters included references to the specification or standard to which work was to be carried out, matters as to quality and issues as to the timing during which work was to be undertaken. Her Honour Judge Kirkham concluded that it would be quite wrong that a party should be entitled to rely upon a document which it was said contained all of the relevant terms in circumstances where there were additional material terms which the other party says were agreed orally.

Then lets look at Carillion Construction v Devonport Royal Dockyard⁽¹⁴⁾ , it represents one of the most recent inroads. Carillion was retained by Devonport to carry out work. After the project ran into problems, the parties discussed changing the basis of payment. It was said that agreement had been reached, orally, between them on 30 October 2001. There was no written agreement to this effect. Later, in August 2002, Carillion began an adjudication based on its entitlement under the alleged oral agreement. The Adjudicator decided that Carillion should be paid £7.5m

Devonport was not prepared to pay because it argued the Adjudicator had no jurisdiction to adjudicate on what was an alleged oral variation to the contract. The matter came before His Honour Judge Bowsher in the Technology and Construction Court on 27 November 2002. He found in favour of Devonport. In doing so, the Judge relied on the earlier Court of Appeal case of RJT Consulting v DM Engineering, which determined that there must be a construction contract made, or evidenced in writing, if an adjudicator was to have jurisdiction. Moreover, said RJT, the contract was not evidenced in writing merely because there were documents that indicated its existence; all the terms of an oral agreement must also be in writing.

The Judge found that the alleged agreement was not evidenced in writing and, accordingly, that the Adjudicator had no jurisdiction in these circumstances. There has been no appeal.

The effects of RJT, Debeck and Carillion may prove serious for adjudication in the UK. As the Judge accepted, disputes over oral construction agreements are very common. It is often the case that important terms of a contract are orally agreed. Parties, often at a site level, agree to vary terms of the contract, sometimes consciously, sometimes not. Such terms are often not incorporated into the signed contract or a formal variation of terms. Accordingly, unless oral terms are put in writing, their existence will secure the non-applicability of adjudication. The RJT case determined that all terms must be evidenced in writing; the Carillion case determines that this applies to oral variations of written terms.

If any contract term or any contract variation is not in writing, there is no right to statutory adjudication. Even if the orally agreed terms are unimportant, this will apply. It is likely therefore that many such construction contracts even if mostly evidenced in writing will fall outside the act. Respondents to adjudications will be able to run the argument before adjudicators that there were oral terms agreed between the parties and that accordingly the Adjudicator does not have jurisdiction.

Even if the Adjudicator rejects that argument, the losing party can apply to the Court for declarations that the Adjudicator had no jurisdiction; provided that there is an arguable case that any terms were not evidenced in writing, they will at least delay the enforcement of any adjudication decision; at worst, the decision will be found to be unenforceable.

Outwith jurisdiction issues, and fundamental and paramount errors that go to the root of a contract, of which more below, the TCC will only overturn an adjudicator’s decision on the basis of a procedural irregularity, i.e. lack of jurisdiction by the Adjudicator, lack of impartiality or apparent/existent lack of natural justice during the process i.e. unfairness .⁽¹⁶⁾

Although the TCC’s role in adjudication would appear fairly restrictive it has the power to review its own relevance in this area. As seen above the TCC has decided for itself the grounds on which an adjudication decision can or cannot be challenged and signs exist that the TCC is developing importance and prevalence in this legal area. If the receiving party is in liquidation or receivership or there is a serious doubt about its ability to repay then a stay of execution may be granted. This principle was recognised in Bouygues v Dahl-Jenson, but has more recent application in the case of Rainsford House Limited (in Administrative Receivership) v Cadogan Limited⁽¹⁷⁾ . In that case, Rainsford fell into the category of “serious doubt on the ability to repay” by the very fact that they were in administrative receivership. The recent case Baldwins Industrial Services v Barr Limited⁽¹⁸⁾ involved Birmingham TCC ordering a payment into Court of the money, which had been adjudged due by an adjudicator and ordered to be paid to the winning party. Baldwins is an example of the situation where the Adjudicator’s decision is up for re-trial and the losing party is worried if the money is paid over meantime it may end up being lost in a financially weak company, and in the event that the litigation is won the money will not be recoverable. In ordering such payments into Court, however, the TCC is going against the concept of adjudication, which was designed to improve cash flow in the construction industry despite the inevitable disputes that crop up .⁽¹⁹⁾

Bovis Lend Lease Limited v Triangle Development Limited ⁽²⁰⁾

What of the status of an adjudicator’s decision? Can you withhold against it? This is a topical issue on enforcement. In Bovis Lend Lease Limited v Triangle Development Limited, Bovis was a management contractor for Triangle Developments for the fit-out of three Victorian schools into three residential apartments. The contract was in the form of the JCT Standard Form of Management Contract 1998 Edition. The contract contained, at clause 7.6.4.1, a clause which stated that any further payment or release of retention shall not apply as a result of the determination of those in his employment.

A dispute arose in respect of the valuation of two interim certificates, in which the architect had reduced certain sums so that each of the two certificates certified a negative value to Bovis. The architect also served a notice on Bovis to the effect that they were failing to proceed regularly and diligently with the works. Triangle then issued a withholding notice in respect of liquidated and ascertained damages following a certificate of non-completion. Bovis claimed that Triangle had repudiated the contract by engaging new contractors, and that Bovis had accepted that repudiation.

During this period three adjudications were being progressed. The first related to the negative interim certificates, the second in respect of Triangle’s claim that Bovis was in breach for a requirement to provide documents and the third relating to the question as to whether the contract had been repudiated.

A variety of questions arose, but one central question related to the status of an adjudicator’s decision. The first Adjudicator’s decision was in conflict with the third in respect of the payments of sums due. The first decision related to the interim valuation, whilst the third related to payments of sum due as a result of the counting process upon determination of the contract.

HHJ Thornton QC held:

1. That as a general rule, the decision of an adjudicator that money must be paid gave rise to a separate contractual obligation of the paying party to comply with the decision;
2. That an effective withholding notice, given before the adjudication notice was given, or in some instances before the decision was issued, would normally be required in order to withhold against an adjudicator’s decision;
3. It was possible for the contractual terms between the parties to supersede or provide a right to deduct from a payment directed to be made by an adjudicator;
4. If such a superseding contractual right had existed then an earlier decision of an adjudicator would not be enforced
5. In this case Triangle was entitled to rely on clause 7.6.4.1 (or the adjudicator’s third decision) in order to withhold sums against the first Adjudicator’s decision;
6. A contention that the determination of Bovis’ employment was invalid or a nullity was not sufficient to entitle Bovis to defeat Triangle’s reliance on clause 7.6.4.1 unless there was an adjudicator’s decision, or sufficient evidence.

Judge Thornton’s decision in Bovis v Triangle opened the door in one fell swoop for contract drafters to devise terms, which would rob adjudicator’s decisions of their teeth. The Court of Appeal has revisited the early authorities such as Macob v Morrison and reaffirmed the purpose of adjudication - to produce a binding and enforceable interim award. In light of this Levolux is a plea for sanity answered.

I and other construction lawyers last Christmas said the Triangle Developments and Parsons Plastics v Pirac⁽²³⁾ decision before it would persuade paying parties to write that type of deduction clause into their contracts and cause untold damage to adjudication. So Levolux came not a moment too soon.

The Claimant, Levolux, was a sub contractor engaged under the GC/Works sub contract with amendments to supply and fit brise soleil and louver panels for the Defendant, Ferson, Levolux served a notice of intention to refer a dispute to adjudication dated 25 March 2002 in respect of a failure to pay application number 2. The Respondent relied upon a notice of withholding payment, but Levolux contended that the notice was not a valid notice within Section 111 of the Act. The Adjudicator issued his decision dated 30 April 2002 which held that the withholding notice did not comply with the requirements for Section 111 of the Act and therefore concluded that payment of £51,659 inclusive of VAT, together with interest, costs and the Adjudicator’s fee should be paid by to Levolux.

The Claimant claimed summary judgment for the amount of the decision. However, the Claimant had commenced the action pursuant to CPR Part 8 (alternative procedure for claims) rather than CPR Part 24 (the part dealing summary judgment). The Defendant accepted that the matter could be heard as a Part 24 matter.

The Defendant’s primary case was that it had determined the sub contract. Alternatively, the Defendant argued that it could rely upon the amended clause and set off and/or counterclaim against the decision of the Adjudicator. The amendment to the GC/Works sub contract stated at clause 38A.11 “neither party shall be precluded from raising any right of set off, counterclaim or abatement in connection with the enforcement of an Adjudicator’s decision”. The Claimant had suspended the works as a result of non-payment. The Defendant then issued determination notices for failing to proceed regularly and diligently. The dispute referred to adjudication was in respect of the valuation and withholding, and did not include an issue in respect of determination.

HHJ Wilcox held that the amount owing pursuant to the Decision should be paid to the Claimant. This was on the basis that the parties had accepted, by reference to clause 38A7 of the contract that a decision would be binding pending litigation or arbitration. The amended clause 38A.11 in respect of a right to withhold and/or set off against an Adjudicator’s decision was in conflict with Section 111(1) of the Act requiring an effective notice.

Therefore, HHJ Wilcox enforced the Adjudicator’s decision.
It is apparent that the Courts will now follow the Court of Appeal's ruling in Levolux and enforce an adjudicator's decision in preference to the contractual provisions providing for set-off. This reinforces the view that a respondent to an adjudication, that considers that it has a cross-claim must commence a cross-adjudication if it is to have any chance any defeating the enforcement of an earlier adjudicator's decision.

The Defendant raised several issues by way of appeal. First, they argued that the contract had been validly terminated, and so the Adjudicator’s decision was inconsistent with the determination. Lord Justice Mantell held that that argument was rejected, as the first instance Judge had held that there had plainly been no valid determination. It was the Adjudicator’s decision that payment should be made, on the basis that the Withholding Notice was invalid, that meant that the subcontractor had a right to suspend such that the Contractor did not have a right to determine the contract for wrongful suspension.

Second, the Defendant argued that there were some exceptions to the principle that an Adjudicator’s decision is binding and enforceable pending final resolution by arbitration or litigation. In respect of this appeal, one of those exceptions was that the terms of the contract to stated that no further payment would be made as a result the obligation to make a payment in accordance with the Adjudicator’s decision.

This exception was based upon HHJ Thornton QC’s judgment in Bovis Lend Lease v Triangle Developments (2 November 2002). Lord Justice Mantell considered that case and the cases upon which Bovis relied. He came to the conclusion that the logic in the cases relied upon by HHJ Thornton was insufficient to support the conclusion reached in Bovis. However, Lord Justice Mantell construed the terms of the contract so as to give effect to the Adjudicator’s decision, and so held that the determination clauses must be read as not applying to amounts due by reason of the Adjudicator’s decision. He therefore dismissed the Appeal. Lord Justice Longmore, and Lord Justice Ward agreed.

Thus the Court held that Ferson and Judge Thornton were wrong. The purpose of s108 was clear. It was a speedy mechanism to settle disputes and lead to enforceable immediate payment obligations. If Ferson and Judge Thornton’s arguments were correct then the purpose of adjudication would be defeated. Any clauses that are inconsistent with s108 must be read as not applying to monies due by reason of an adjudicator's award.

What then of mistaken adjudicator – how far wrong of the tracks must he be?

The second Court of Appeal decision relating to adjudication, and touching on Section 111 withholding notices was C&B Scene Concept Design Limited v Isobars Limited, 31 January 2002. The case concerned the jurisdiction of the Adjudicator, and appeared to focus on appendix 2 of the JCT WCD. In the absence of the selection of either payment alternative A or B, the Judge decided that the payment mechanism fell away and was replaced with the Scheme. The result was that the decision was not enforced.

At the summary judgment application in the TCC, three reasons for non-compliance with the Adjudicator’s decision had been advanced. First, since the parties had failed to select alternative A or B, the whole of clause 30 fell away, the provisions requiring the employer to give notice also fell away, and the provisions of the Scheme applied. Second, failure to give notice does not preclude the employer from arguing that sums are not “due under the contract”. Third, the Adjudicator had asked the wrong legal question by failing to appreciate that clause 30 had been superseded by the Scheme.

Sir Murray Stuart Smith considered that the real question was whether the error on the part of the Adjudicator went to his jurisdiction. He applied the law which has developed in respect of expert determination, citing the test set out by Knox J in Nikko Hotels (UK) Limited v MEPC plc [1991] 2 EGLR 103:

If he answered the right question in the wrong way, his decision will be binding. If he had answered the wrong question, his decision will be a nullity.

Sir Murray Stuart Smith concluded that the Adjudicator was asked to decide the amount of the interim application number 6. Within the scope of that referral the Adjudicator may have made some errors of law along the way, he had not exceeded his jurisdiction. He has decided the matter put to him and the decision would be enforced.

The Court of Appeal simply avoids the issue by referring to the law on expert determination and making its decision on that basis. The question of whether clause 30 of the contract, or the payment provision of the Scheme, were to apply (and so a consideration of whether a valid withholding notice had been given) was not considered. Instead, the Adjudicator had jurisdiction to consider which terms where to apply, and whether right or wrong, his decision would be enforced.

But how “wrong” must a decision be before the Court will intervene, if indeed the Court would intervene at all? For example, if the parties delete the clause from the standard form in its entirety such that the only sensible conclusion must be the Scheme applies. What if the Adjudicator nonetheless bases his decision on the terms of the deleted provision. Can that “wrong” decision be one that is within the Adjudicator’s jurisdiction, or is it a decision that no reasonable adjudicator would make, such that a Court would invoke the public law Anisminic principles? In the case of Anisminic Limited v The Foreign Compensation Commission [1969] 2 AC 147 Lord Reid said:

It has sometimes been said that it is only where a tribunal acts without jurisdiction that its decision is a nullity. But in such cases the word “jurisdiction” has been used in a very wide sense, and I have come to the conclusion that it is better not to use the term except in the narrow and original sense of the tribunal being entitled to enter on the inquiry in question. But there are many cases where, although the tribunal had jurisdiction to enter on the inquiry, it has done or failed to do something in the course of the inquiry, which is of such a nature that its decision is a nullity. It may have given its decision in bad faith. It may have made a decision, which it had no power to make. It may have failed in the course of the inquiry to comply with the requirements of natural justice. It may in perfect good faith have misconstrued the provisions giving it power to act so that it failed to deal with the question remitted to it and decided some question which was not remitted to it. It may have refused to take into account something, which it was required to take into account. Or it may have based its decision on some matter, which, under the provisions setting it up, it had no right to take into account. I do not intend this list to be exhaustive. But if it decides a question remitted to it for decision without committing any of these errors it is as much entitled to decide that question wrongly as it is to decide it rightly.

The Courts have at first instance given some consideration to the applicability of the public law principals to adjudication. Lord Reed in the case of Ballast plc v The Burrell Company (Construction Management) Limited (21st June 2001) considered that Lord Reid’s principles were applicable to adjudication, and provided some useful guidance for determining when an adjudicator might be able to make a decision that was both wrong in law and in fact, but should nonetheless be upheld, and those situations where the line had been crossed such that the decision was in excess of jurisdiction and unenforceable. However, HHJ Seymour QC in the more recent case of Shimizu Europe Limited v Automajor Limited (17th January 2002) rejected the public law approach of Anisminic or the Wednesbury principles⁽²⁴⁾. This appears to be on the basis that the judicial review principles, whilst applicable in Scotts Law were not applicable in English law.

Summing up
The status of an adjudicator’s decision may not yet be entirely resolved. However, it is respectfully submitted that HHJ LLoyd QC’s view in David McLean⁽²⁵⁾ that the decision does not itself create a cause, of action but that the cause of action arises out of the rights and obligation set out in the contract between the parties is the preferred approach. The decision was of temporary effect and should be enforced, but the Claimant may, at some future date, have to establish its rights, and cause of action pursuant to the contract in respect of its particular claim. Thus on that basis an action to enforce an adjudicator’s decision is an action to enforce the right or the liability that has been upheld by the Adjudicator in the Adjudicator’s decision not the decision itself.

On more settled ground is the approach to enforcement of the Court, by way of analogy to the test in expert determination. Provided that the Adjudicator has asked the right question, then the Adjudicator has the jurisdiction to reach an enforceable decision even where that decision is wrong in fact or law. While this approach allows the Court to simply assess the jurisdiction of the dispute in question and come to a conclusion about its enforceability, it does not provide an opportunity for the Courts to address some of the wider issues.

The Courts have in some instances adopted a more cautious approach to the enforcement of adjudication. However, it must be right that both parties understand the subject matter of the dispute that is to be referred to adjudication, and can expect the “natural justice” safeguards to apply to the process of adjudication as one would expect those proper checks and balances to apply to any dispute resolution process. Nonetheless, the case of RJT Consulting may provide many opportunities for jurisdictional challenges on essentially technical grounds. Levolux means that one must cross adjudicate in order to defeat a decision relating to interim contractual processes, such as interim valuations. It remains to be seen whether future Court of Appeal cases will adopt such a restrictive approach or whether we will see a return to the purposive approach originally pioneered by His Hon Mr Justice Dyson.

3. Case Management and CMCs – better than the old days?

Where it started

As Lord Woolf said:

…throughout the common law world there is acute concern over the many problems which exist in the resolution of disputes by the civil Courts. The problems are basically the same. They concern the processes leading to the decisions made by the Courts, rather than the decisions themselves. The process is too expensive, too slow and too complex. It places many litigants at a considerable disadvantage when compared to their opponents. The result is inadequate access to justice and an inefficient and ineffective system.

The problem is not a new one. There have been many attempts to address it. Since 1851 there have been some 60 reports on aspects of civil procedure and the organisation of the civil and criminal Courts in England and Wales.

Without effective judicial control, however, the adversarial process is likely to encourage an adversarial culture and to degenerate into an environment in which the litigation process is too often seen as a battlefield where no rules apply. In this environment, questions of expense, delay, compromise and fairness may have only low priority. The consequence is that expense is often excessive, disproportionate and unpredictable; and delay is frequently unreasonable.

This situation arises precisely because the conduct, pace and extent of litigation are left almost completely to the parties. There is no effective control of their worst excesses. Indeed, the complexity of the present rules facilitates the use of adversarial tactics and is considered by many to require it. As Lord Williams, a former Chairman of the Bar Council, said in responding to the announcement of this Inquiry, the process of law has moved from being “servant to master, due to cost, length and uncertainty.

Lord Woolf made the template and set the scene with a number of major new principles to make the system of civil justice more efficient and productive. He said in Access to Justice:

The defects I identified in our present system were that it is too expensive in that the costs often exceed the value of the claim; too slow in bringing cases to a conclusion and too unequal: there is a lack of equality between the powerful, wealthy litigant and the under-resourced litigant. It is too uncertain: the difficulty of forecasting what litigation will cost and how long it will last induces the fear of the unknown; and it is incomprehensible to many litigants. Above all it is too fragmented in the way it is organised since there is no-one with clear overall responsibility for the administration of civil justice; and too adversarial as cases are run by the parties and not by the Courts and the rules of Court, all too often, are ignored by the parties and not enforced by the Court.

As commentators have remarked many times, case management by the Court is central to the Civil Justice Reforms. The impact of case management in TCC cases is probably less than in any other area of litigation, for two reasons. First it is a major part of the case management approach that the Court will allocate each case to an appropriate track; all TCC cases, however, are treated as fast track cases. Secondly, Lord Woolf’s reforms were modelled upon the sort of case management techniques developed by the Official Referees⁽²⁸⁾ and in particular the technique whereby the Court, at an early stage, fixes a trial date, and sets a timetable for the whole matter leading to that date⁽²⁹⁾ . The case management provisions in the CPR have nevertheless had a material impact even in TCC cases.

Court’s Duty To Manage Cases

Rule 1.4

1. The Court must further the overriding objective by actively managing cases.
2. Active case management includes –

   (a) encouraging the parties to co-operate with each other in the conduct of the proceedings;
   (b) identifying the issues at an early stage;
   (c) deciding promptly which issues need full investigation and trial and accordingly disposing summarily of the others;
   (d) deciding the order in which issues are to be resolved;
   (e) encouraging the parties to use an alternative dispute resolution procedure if the Court considers that appropriate and facilitating the use of such procedure;
   (f) helping the parties to settle the whole or part of the case;
   (g) fixing timetables or otherwise controlling the progress of the case;
   (h) considering whether the likely benefits of taking a particular step justify the cost of taking it;
   (i) dealing with as many aspects of the case as it can on the same occasion;
   (j) dealing with the case without the parties needing to attend at Court;
   (k) making use of technology; and
   (l) giving directions to ensure that the trial of a case proceeds quickly and efficiently.
   
   

Proportionality is a key concept, but there is no express guidance as to what is proportionate. It is obviously not proportionate for litigation to cost more than the amount in dispute, but that has traditionally been the norm in contested construction cases.

The role of ADR in litigation is now enshrined in the CPR. By Rule 1.4 (1) the Court must further the overriding objective by actively managing cases, and by Rule 1.4(2) active case management includes encouraging the parties to use an alternative dispute resolution procedure if the Court considers that appropriate and facilitating the use of such procedure.
Whilst the CPR does not transfer an adversarial process into an inquisitorial one, yet nevertheless the new rules will encourage the Court to take greater initiative. It has general power to exercise its powers of its own initiative ⁽³⁰⁾ , and can fix hearings at its own initiative.

Procedures for case management

The key to case management in the TCC starts with the application⁽³¹⁾ for directions (including an application for a fixed date of hearing), which must be made by the Claimant within 14 days of the filing by the Defendant of an acknowledgement of service or of a defence (whichever is the earlier)⁽³²⁾ . If the Claimant does not make such application, then any other party may do so or may apply for the claim of the Claimant in default to be struck out or dismissed, or a TCC Judge may fix the hearing on his own initiative⁽³³⁾ . In my experience of TCC cases in London the Judge usually fixes a date of his own motion well before a defence is served.

Para 5.1 of PD49C provides that the first case management conference will take place at this directions hearing, but not always, as if the Judge thinks more time for consideration is needed, he will adjourn the first hearing in order that the case management conference can be heard later. This is particularly likely in multi-party cases where one or more of the Defendant wants to bring Part 20 proceedings against additional parties.

There is no prescribed form for the application.

In complex cases, parties typically also put in skeleton arguments as to the directions they want and why; the form of these skeletons differs little from the old practice.

If a party fails to exchange or return the forms by the date specified, the Court may make an order, which leads to the claim or defence being struck out, or impose such other sanction as it sees fit, or may hold a case management conference without the forms.

At the first case management conference, the Court will usually fix the date for trial of the case and of any preliminary issue that it orders to be tried. It will also give case management directions e.g. pleadings, disclosure, experts, witness statements. The directions will usually include the fixing of a date for a pre-trial review.

If the parties have agreed proposals for the management of the proceedings (including a proposed trial date or period in which the trial is to take place) and the Court considers that the proposals are suitable, then it may approve them without a hearing and give directions in the terms proposed⁽³⁶⁾ .

Recent findings

The Civil Justice Reform Evaluation - Emerging Findings⁽³⁷⁾ was a report put together by the Lord Chancellor’s Department in March 2001 to assess the effects and outcome of the civil justice reforms at a fairly early stage (only 11 months after implementation). The report suggests that CMCs “appear to have been a success”, however, two years on is this still the case? The CMCs are possibly slightly reflective of the other European inquisitorial systems, though of course the powers of the English Judge are no where near as extensive ie in France, where the Judge or judge generally has primary responsibility for defining issues in dispute and investigating evidence resulting in the case in Court being judge led as opposed to party led. The latest report from the LCD - Further Findings published in August last year (2002) stated that one of the main effects of the CMCs is the reduction in the number of applications being made during litigation and 98% pf questionnaire respondents said the CMCs “were working very well or quite well”.

4. Speed and accessibility

One thing is for sure, compared to the heady litigious days of the late 1980’s to mid 1990’s, the TCC issue room today is not what they used to be – volume is down and the price of issue of process in an anti Woolf way a high one!

Recent figures published by the TCC in January show the following waiting times:

Trials up to 4 days - January 2003 onwards
Trials up to 8 days - January 2003 onwards
Trials up to 24 days - June 2003 onwards
Trials over 28 days - October 2003 onwards

Unfortunately, there are no comparable figures available from the TCC for previous years. However, the Further Findings report states that generally, post-CPR, the time between issue and hearing for cases that proceed to trial has decreased⁽³⁹⁾ and 51% of the trials took less than a year. Recently in major proceedings I had issued in December 2002 a 32 case was listed in an open judicial diary, as a first and only fixture for 32 days in January 2004.

5. Experts and TeCSA Expert Witness Protocol

Introduction

In his Final Report on Access to Justice (July 1996) Lord Woolf discussed at length what he perceived to be the principal problems with expert evidence in litigation. These were as follows:

(a) Excessive cost. The Report describes expert evidence as one of the major generators of unnecessary cost in civil litigation (the other being uncontrolled discovery).
(b) An unnecessary proliferation of expert evidence. The Report refers to the emergence of an “expert industry”.
(c) A lack of impartiality⁽⁴⁰⁾ . Expert evidence was likely to be biased in favour of the party instructing the expert.

Who is an expert witness?
Answer: A witness, who is entitled to give opinion evidence, based on facts, in writing or orally in a Court or tribunal. A person, who has specialist knowledge, qualifications and/or experience in a particular field, may give opinion evidence.
There is some essential reading for any construction expert witnesses to keep within the Rules and his duties to the Court:

• CPR35 35 PD
• Draft Code of Guidance for Experts (Note the distinction between the expert's advisory role and the writing of a report or the giving of evidence for the Court)
• Chartered Surveyors Acting as Expert Witness Practice Statement 2001
• Chartered Surveyors Acting as Expert Witness Guidance Notes 2001
• TeCSA Expert Witness protocol

Independent, objective, unbiased, honest

CPR 35.3: The Expert's Overriding Duty is to the Court

1. It is the duty of an expert to help the Court on matters within his expertise.
2. This duty overrides any obligation to the person from whom he has received instructions or by whom he is paid.

Rule 35.3 of CPR Part 35 states as follows:

1. It is the duty of an expert to help the Court on the matters within his expertise.
2. This duty overrides any obligation to the person from whom he has received instructions or by whom he is paid.

Lord Woolf’s Final Report contained 7 key recommendations as to how these perceived problems were to be remedied. These recommendations are as follows:

(a) That as a general principle single experts should be used wherever the case concerns a substantially established area of knowledge and it is not necessary for the Court directly to sample a range of opinions.
(b) Parties and procedural judges should always consider whether a single expert would be sufficient.
(c) Where opposing experts are appointed they should adopt a co-operative approach including if possible joint investigation and a single report.
(d) Expert evidence should not be admissible unless all written instructions, including letters subsequent upon the original instructions, are included as an annexe to the expert’s report.
(e) The Court should have a wide power to order that an examination or test should be carried out and a report submitted to the Court.
(f) Meetings between experts advising opposing parties should normally be held in private.
(g) Training courses and published materials should provide expert witnesses with a basic understanding of the legal system and their role within it, focusing on the expert’s duty to the Court.

These key principles endorsed by the Court of Appeal in Ikarian Reefer, were widely circulated and became the standard by which experts were judged. Despite the general acceptance of these criteria, that acceptance did not take effect quickly enough to prevent growing judicial dissatisfaction with the way in which expert evidence was presented. Lord Woolf highlighted three “problems”: excessive cost, lack of impartiality and the emergence of an “expert industry”.

A number of decisions followed which clearly took note of some of these principles. Whilst Mr Justice Dyson’s attack, in Pozzolanic Lytag Ltd v Bryan Hobson Associates (1998) CILL 1450, on the conduct of experts and their “prolix reports” was widely publicised, the Courts were also alive to the second of Lord Woolf’s concerns, namely lack of partiality.

In London Underground Ltd v Kenchington Ford plc and Others (1998) CILL 1452, HHJ Wilcox criticised one expert for adopting a partisan approach, noting that he”… signally ignored his duty to both the Court and his fellow experts” and “continued to assume the role of advocate of his client's cause.” This undoubtedly affected the weight given to that evidence, characterised as being “invalid and unscientific”.

In a second case, Munkenbeck and Marshall v Kensington Hotel (1999) 15 Const LJ 231, HHJ Wilcox went further and expressly downgraded the evidence of an expert who “… badly lost sight of the proper role of an expert assisting the Court in the determination of issues … adopted the stance of an advocate. The value of his evidence was thus very greatly diminished. I was wholly satisfied with the evidence of Mr Melvyn; an impressive witness and a fair and objective witness”.

These criticisms were reinforced by the Court of Appeal in Clonard Developments Limited v Humberts (unreported Court of Appeal 15 January 1999), which upheld a trial judge’s decision to reject the evidence which was “unhampered by impartiality” of the expert witnesses of both parties. The Court of Appeal warned that:

A judge sitting at first instance must always be astute to the possibility that the expert before him may not be fulfilling his role as an impartial or objective adviser to the Court and is seeking to espouse the cause for which he has been instructed … If this were his perception it was his duty to say so and to act accordingly by rejecting or discounting those parts of their evidence which were so tainted.

Restrictions on the use of expert evidence

The general principle for the last 4 years is that if expert evidence is required it will have to be justified (at an early stage in the proceedings) and, that in accordance with Rule 35.1 of CPR Part 35, the Court is under a duty to restrict expert evidence, “to that which is reasonably required to resolve the proceedings.” This places burden of justifying the need for expert evidence in the proceedings squarely upon the parties.

It follows that if a party cannot convince the Court of the need for expert evidence such evidence will not be permitted and the party will have to proceed without it. Under the old regime the Court’s permission was always required to adduce expert evidence and this is reiterated in the new rules in CPR Part 35 Rule 35.4(1). The difference is that, under the CPR the granting of permission to adduce expert evidence will not be automatic. Note that the test in Rule 35.1 is not whether expert evidence is required but whether it is reasonably required. We can expect submissions in support of expert evidence to be closely scrutinised by the Courts that will apply the principles of the overriding objective set out in CPR Part 1.

In my expectation the Courts will deal rather brusquely with applications to adduce expert evidence in ‘simple’ or smaller actions of less than £100,000 and where an obvious argument for independent opinion evidence cannot be made out. There are indeed one or two TCC Judges that make the admission of such evidence remarkably difficult. A fair number of applications to adduce expert evidence of various disciplines are likely to be rejected, no doubt to the surprise/consternation of the parties and their lawyers. In relation to certain types of litigation, for example, medical negligence and personal injury cases, the Courts have been more brusque still. (It is generally accepted that curbing the proliferation of expert evidence with these two areas is a specific object of Lord Woolf’s reforms.)

Assuming a party obtains permission to adduce expert evidence the new rules contain a further restriction upon how the evidence is to be presented. Rule 35.3 establishes a presumption that expert evidence will be given in a written report. Oral evidence from an expert supplemental to the report is intended to be the exception rather than the rule. If a party anticipates that oral evidence will be required, this requirement will have to be justified to the Court, which will be likely to pose the sometimes difficult question, “Why?” in response. The overriding objective will again be applied.

It is important to note that under CPR Part 32 Rule 32.1 the Courts have a general power to control the evidence⁽⁴¹⁾ to include the exclusion of otherwise admissible evidence and limit cross-examination⁽⁴²⁾ . In reality the Court always possessed the power to ignore inappropriate expert evidence (e.g. evidence that was irrelevant or reflected the expert’s attempt to act as an advocate)⁽⁴³⁾ but this power is exercised more forcefully and proactively in the spirit of the new rules. The rules also contain a sting in the tail that from the outset the Court is entitled to limit in advance the costs a party may ultimately recover in respect of the fees and expenses of an expert upon whose evidence they propose to rely⁽⁴⁴⁾. This power to “cap” experts’ costs may make the party think twice about using expert evidence at all. However I have not seen it exercised as yet.

The TeCSA Expert witness protocol

It started in 1996⁽⁴⁵⁾ with the Official Referee's Solicitors Association (ORSA) protocol 1.0 to promote the interests of solicitors and their clients conducting business in the Official Referee's Courts and in related arbitration.

The then Committee of ORSA rightly believed that the relationship between solicitor and expert witness is of the utmost importance in view of the duties each owes to the Court or other tribunal. The first protocol had been prepared with a view to assisting clarity of communication and in order to provide a framework within which solicitors and experts are able to operate freely. It was not intended that the protocol should operate in a rigid way but that reference to it would enable experts and solicitors to consider key areas at an early stage.

Its publication arose out of the ORSA Response to the Issue Paper on Expert Evidence released by the Access to Justice Team in January 1996.

The new version 2.0 TeCSA Expert Witness Protocol has been produced as a revised guide to experts when providing expert evidence be that in the TCC or arbitration. The guide holds to its original aim of not intending to be restrictive or rigidly applied but is a means of regulating the relationship between solicitor and expert, whilst also aiming to help experts fulfil their role properly and adequately. The protocol is an additional tool to be used in conjunction with Part 35 CPR and one of its aims is to reinforce the independence and impartiality of the expert. The protocol does not repeat or restate the technical legal requirements of the CPR rules it is more concerned with defining the solicitor/expert relationship ie part B relates to the nature and contents of the brief to be given to the expert by the solicitor, parts D and E are concerned with Without Prejudice Expert meetings.

Although observance of the protocol is not compulsory, its use in making sure that Part 35 is properly observed and that an expert carries out his role appropriately cannot be underestimated. The Courts have shown and continue to show that if an expert is not seen as impartial, independent or of any practical use in solving a dispute then that evidence can be dismissed from the action⁽⁴⁶⁾ .

With this in mind I leave you with the best practice expert declaration, it sums up the legal requirements in a nutshell:

1. I understand that my primary duty in written reports and giving evidence is to the Court, rather than the party who engaged me;
2. I have endeavoured in my reports and in my opinions to be accurate and to have covered all relevant issues concerning the matters stated which I have been asked to address;
3. I have endeavoured to include in my report those matters, which I have knowledge of or of which I have been made aware, that might adversely affect the validity of my opinion;
4. I have indicated the sources of all information I have used;
5. I have not without forming an independent view included or excluded anything which has been suggested to me by others (in particular my instructing lawyers);
6. I will notify those instructing me immediately and confirm in writing if for any reason my existing report requires any correction or qualification;
7. I understand that:

   (a) my report, subject to any corrections before swearing as to its correctness, will form the evidence to be given under oath or affirmation;
   (b) I may be cross-examined on my report by a cross-examiner assisted by an expert;
   (c) I may be the subject of adverse criticism by the Tribunal if it concludes that I have not taken reasonable care in trying to meet the standards set out above.

8. I confirm that I have not entered into any arrangement where the amount or payment of my fees is in any way dependent on the outcome of the case.
   
   

For those of you who have not accessed the TeCSA website lately I set out the Protocol in full below.

EXPERT WITNESS PROTOCOL – Version 2.0

The Technology and Construction Solicitors Association (TeCSA) was formed to promote the interests of solicitors and their clients conducting business in the Technology and Construction Court and in related arbitration.

The Committee of TeCSA believes that the relationship between solicitor and expert witness is of the utmost importance in view of the duties each owes to the Court or other tribunal. This protocol has been prepared with a view to assisting clarity of communication and in order to provide a framework within which solicitors and experts are able to operate freely. It is not intended that this protocol should operate in a rigid way but it is hoped that reference to it will enable experts and solicitors to consider key areas at an early stage.

The publication of this protocol arises out of the TeCSA Response to the Issue Paper on Expert Evidence released by the Access to Justice Team in January 1996. TeCSA hopes that this protocol will encourage independence and impartiality of the expert.

Not all of this protocol will apply to every appointment and there will inevitably be areas, which the protocol does not specifically cover. It is intended to keep this protocol under review and comments will be most welcome. TeCSA supports the Code of Practice published by the Law Society and acknowledges comments made by many bodies and individuals as part of the consultation process.

Protocol

A. Section

1 The solicitor shall provide sufficient information to the expert to enable the expert to confirm whether or not the issues, as identified by the solicitor, are matters on which the expert is competent to act as expert witness. The expert should be satisfied that he has the necessary resources to meet the requirements of the appointment, including the required timetable. TeCSA encourages the appointment of experts who maintain active professional practices.

Conflicts and Confidentiality

2 The solicitor shall provide the expert with a list of relevant parties and the expert shall state whether or not he has any connection with any of the parties named or to be reasonably inferred from the list to enable the solicitor and the expert to consider whether any conflict of interest exists.

Information

3 The expert should normally expect to provide information about his expertise and experience and suitability for the role for which he is being considered together with details of his proposed basis of charge. If the solicitor intends to approach more than one person to discuss his or her potential suitability for appointment as an expert witness, he should inform each expert that he is one of a number under consideration.

Independence of Expert

4. In any selection and appointment process the solicitor should remember that a witness who is not selected or whose appointment is subsequently terminated may be free to accept an appointment from other parties. The solicitor may wish to ensure that documentation and information made available as part of any selection process is carefully chosen, commensurate with the requirement to provide relevant information, and that documentation is retrieved at the end of the process or of an appointment. The expert should be reminded that any documentation provided to him is subject to the rules relating to privilege.

B. Brief

5 As soon as possible after the expert has been appointed, the solicitor shall explain the client's commercial and legal objectives in a manner commensurate with the independence of the expert and prepare for the expert a brief which shall be in a form appropriate to the nature and complexity of the matter on which the expert is asked to form an opinion. The Brief will normally contain the following information:

Party making appointment

Subject matter:

• Contacts
• Nature of proceedings
• Timetable fixed in any proceedings and current status
• Pleadings in any action which has commenced
• Details of other experts appointed by the party making appointment and others, if known, with field of expertise.
• In a large or complex matter the method by which experts are to coordinate their services. Is there to be a lead expert with whom other experts will liaise? Area in which the expert is called upon to give his opinion.
• Specific issues on which the expert is asked to advise. In an appropriate case the solicitor should prepare a detailed Statement of Issues for the expert.
• Timescale within which the expert is asked to prepare:
• Initial review and advice on technical issues pleaded or assistance in preparing the client's pleaded case
• Draft report for discussion and review of brief report for issue.

Details of key documentation and details of location of all relevant documents. In a straightforward case appropriately bundled documents should accompany the brief but in a complex case the expert may be required to review documentation and the brief itself will contain only limited documentation.
The brief should outline the principles of privilege and discovery.

6 On receipt of the brief the solicitor and the expert should review the nature and extent of the brief with regard to the role of the expert and those of any other experts appointed by the solicitor. If the expert has been appointed prior to the solicitor's involvement, it is important that a brief is established jointly. The proliferation of experts should be avoided. The solicitor should be aware that there may be no need to appoint a separate expert in every relevant discipline and that a carefully selected expert may be able to cover more than one area.

7 The solicitor and the expert should keep the brief under review at all times and advise each other of any material changes to relevant issues. The expert should not undertake work outside the brief without the prior approval of the solicitor.

8 The scope of the expert's appointment should be defined and the expert should be appointed in a way that will avoid costs being wasted.

9 The solicitor may wish to discuss with those representing other parties the matters on which expert opinion is required in order to assist and refine the brief.

Timescale

10 The solicitor and the expert shall agree the overall timescale and the programme within which the expert shall work. If either the solicitor or the expert becomes aware of any matter likely to affect that time scale, they should advise the other. The exact timing and sequence will vary from case to case. Consideration should be given to the extent of the expert's required attendance at any hearing. These issues should be discussed at an early stage.

Hearing Date

11 The solicitor should keep the expert advised of the time scale set in any litigation or arbitration or of any timetable which is to be met and of any changes that are likely to be made, including in the expected length of or dates of any hearing or trial.

12 The expert when advised of any hearing or trial date on which he is likely to be required to attend or give evidence shall make that date available and inform the solicitor if there are any pre-existing commitments likely to affect the expert's ability to fulfil the appointment.

13 Where the expert has pre-existing commitments the solicitor and the expert shall work together in order that the interests of the client can best be served. The expert shall not take on new commitments which might interfere with his responsibilities under the appointment without first assessing the position with the solicitor.

C. Reports

14 The report should normally be issued to the solicitor as a draft for discussion and should be accompanied by any documents not originally supplied by the solicitor to the expert. The solicitor and the expert should discuss the format of the report, provided that the report remains the independent product, of the expert. It is wise for the solicitor and the expert to test the expert’s opinions in the light of alternative facts contended for by the client's opponent.

15 When the expert's report has been finalised it will normally be exchanged by the solicitor and not by the expert. Usually simultaneous exchange is appropriate, but in certain cases sequential exchange may be required. The expert and the solicitor should discuss this early in the appointment. The expert's report and any copyright in it will normally be the property of the client.

16 The expert and the solicitor will need to review the status of the report if the underlying facts change or if the expert's opinion alters.

D. Without Prejudice Meetings

17 It is common practice for a tribunal to order the parties' expert witnesses to meet to identify those parts of their evidence, which is in issue. There is no standard format for such meetings. What follows is intended as a guide.

18 Meetings of experts should normally take place before exchange of the experts' reports. The predominant view of TeCSA is that, if exchange takes place first, it is more likely that “positions” are taken too early to the detriment of proper discussion at the meeting.

19 The meeting may be most effective if one expert chairs it and an agenda agreed in advance. It may also be of value for the experts to exchange key criteria, which they wish to discuss, for example, Standards or Codes of Practice or methods of valuation. It is appropriate for the parties' solicitors in conjunction with their experts to identify matters in issue in order to determine items for the agenda. Lawyers and clients should not be present at the without prejudice meeting of experts. It is important that the meeting of experts addresses the matters of expert evidence that relate to the matters in issue in the proceedings. The meeting is not the place for the lawyer to “surprise” the other party's expert with a new theory or new documents.

20 Close liaison will be necessary between solicitor and expert and amongst experts in order to make best use of the meeting. Normally experts of like discipline will meet together. Occasionally it will be appropriate to have meetings of experts in more than one discipline, usually following the initial meeting. For example Architect, Structural Engineer and Quantity Surveyor, from all parties, might meet to discuss the nature and extent of remedial works contended for.

E. Notes of Without Prejudice Meetings

21 The expert should report to the solicitor promptly after the meeting and discuss any apparent agreement or narrowing of issues.

22 The expert should, in conjunction with other experts of like discipline, prepare a written note signed by each of them as to matters of opinion on which they are agreed. The note should, where possible, give brief reasons for the views held. It should be remembered that matters of fact are for the tribunal or the agreement of the parties and not matters for the experts to agree between them. Where not all experts can agree a particular point, limited agreements should be explored.

23 If areas of apparent agreement on matters of opinion emerge at a without prejudice meeting, it is good practice to record these promptly to ensure accuracy. It may be appropriate for the expert to reflect on the issues following the meeting. A solicitor should not instruct an expert to apply pressure upon the experts of other parties.

24 The expert does not normally have authority to bind the client, but the solicitor should make sure that the expert is aware of the extent of the expert's authority and that matters which the expert agrees in a note of the meeting may be binding on him.

25 It is good practice for the expert to ensure that all written notes of the meeting are marked “without prejudice” until clearly agreed by two or more experts.

26 The solicitor shall never impede the expert in reaching agreement or forming an opinion but can give guidance to the expert in formulating the note to reflect the matters in issue in the proceedings.

F. Expert's Duty and Reporting

27 The expert shall comply with the requirements of the brief and exercise the reasonable skill and care of a person of the expert's profession, occupation or experience in providing advice on the matters in issue. In giving evidence the expert shall act impartially and owes an overriding duty to the Court or tribunal.

28 The expert shall not express a final concluded opinion until he has considered all relevant issues of fact. The expert will advise the solicitor if the brief appears incomplete or where the expert believes other information is likely to be available.

29 The expert shall advise and assist the solicitor generally, where appropriate, beyond the matters on which the expert is required to give a formal opinion. The expert's report should contain the substance of the expert's evidence that it is intended to give at the tribunal and should be prepared in a clear and succinct manner. The solicitor and the expert should discuss the format of the report. It is not the role of the expert to make a finding of fact, which is in issue. Where an opinion depends upon facts, which are in issue, this should be clearly stated.

30 The solicitor shall throughout the currency of the appointment keep the expert up to date with information and issues as they relate to the appointment. The expert shall keep any opinion under review and have regard to all relevant matters when advising and assisting the client and the solicitor. After reports have been exchanged the expert and the solicitor should consider the need for a supplemental report.

G. Fees

31 Fees and terms and conditions should be clearly agreed at the outset of an appointment. An appropriate breakdown, daily rate and hourly rate equivalent should be provided. Fees shall be inclusive except where survey, laboratory or other costs are expressly stated separately.

Payment of Fees

32 The expert and the solicitor should consider and agree whether the solicitor appoints the expert and is responsible for the expert's fees, or whether the solicitor acts as agent for the client by whom all invoices are to be paid.

Budget

33 The expert should normally provide a budget for various stages of any appointment where the work is identifiable. The solicitor and the expert should ensure that fees are proportionate to the value or importance of the matters in issue.

34 It should be made clear and agreed at the outset how regularly fee invoices are to be rendered, what degree of information they are to contain and whether they are to be sent to the solicitor or the client. The expert shall provide supporting information and keep accurate contemporaneous records sufficient to justify the fees claimed or as may be required in any taxation of costs or similar procedure.

Legal Expenses Insurers

35 The solicitor should always advise the expert in advance where the agreement and payment of the expert's fee is subject to the approval of legal expenses insurers and should immediately notify his expert of any ceiling on fees.

Legal Aid

36 If the expert is appointed in a case where the solicitor's client has a legal aid certificate in force the solicitor must advise the expert of the basis on which interim fees can be claimed from the legal aid fund and whether the expert is to be appointed on the basis that the expert's fees may be reduced on legal aid taxation. The solicitor shall advise the expert immediately of any change in the client's legal aid status.

Cancellation and Commitment Fees

37 Cancellation charges shall only apply if they have been discussed and agreed at the outset of the appointment and where the expert can establish that he has no other appropriate work to undertake. The expert should not normally charge a minimum or commitment fee. The level of charge, which may be on a sliding scale, should aim to compensate the expert for disruption and inefficiency in rearranging his diary at short notice and not aim to provide remuneration for the whole of the period cancelled.

Security

38 Where the solicitor has appointed the expert as agent for the client, the expert may request that the client lodge with the solicitor, or in a designated account, sufficient monies to provide reasonable security for the likely fees of the expert. The solicitor and the client will have regard to the financial status of the client.

TeCSA welcomes comment on this protocol.